) reported adjusted earnings per share of 35 cents in the fourth
quarter of fiscal 2013, higher than the year-ago adjusted
earnings of 33 cents but below the company's expectations of
36−37 cents. The result also missed the Zacks Consensus Estimate
by 2 cents. Fiscal 2013 adjusted earnings came in at $1.50 per
share, up 8.7% year over year.
On a reported basis, net loss in the fourth quarter was $1.1
billion or $4.11 per share, significantly wider than net loss of
$77.8 million or 29 cents per share in the prior-year quarter.
Full-year reported net loss was $1.2 billion or $4.36 per share,
considerably lagging the year-ago net loss of $73.6 million or 28
cents a share.
Quarter in Detail
Revenues were $622.1 million in the quarter, up 3.7% from the
year-ago adjusted revenues of $600.2 million. The year-ago
adjusted figure was on the basis of contingent revenues earned
under Hologic's collaboration with
(NVS), which was eliminated as a result of the effect of purchase
accounting. Despite solid growth, the top line was below the
Zacks Consensus Estimate of $625 million. However, revenues
exceeded the company's guidance range of $615−$620 million.
For the full year, on a pro forma basis (including certain
adjustments related to Novartis collaboration and other),
revenues came in at $2.5 billion, up 24.9% from the year-ago
In the reported quarter, strong growth in 3D tomosynthesisand
MyoSure product lines and a favorable increase in service
revenues were offset by poor ThinPrep and NovaSure sales and 2D
mammography system sales due to the mix shift to 3D. Unfavorable
currency had a negligible impact on revenues.
Subsequent to the Gen-Probe deal, Diagnostics became the
largest segment at Hologic. The core segment recorded growth of
14.4% year over year on a reported basis and 9.4% year over year
on an adjusted basis to $290.0 million in the reported quarter.
The upside was primarily led by the inclusion of the Gen-Probe
portfolio for a full quarter, somewhat neutralized by lower
ThinPrep sales and weaker contributions from legacy products.
The company's other segments − Breast Health, GYN Surgical and
Skeletal Health − recorded respective sales of $234.2 million (up
1.7% year over year), $76.7 million (down 3.8%) and $21.2 million
The upside at the Breast Health segment was driven by a 4.3%
increase in service revenues from the company's increasing
installed base of digital mammography systems, along with a rise
in product revenues. The growth in product sales was driven by an
increasing sales shift to 3D Dimensions systems from 2D Selenia
and 2D Dimensions systems. Product revenues from 3D Dimensions
systems increased a stupendous 50.5%, partially offset by an
overall sales decline of 2D systems.
The GYN Surgical business recorded a downfall on account of
lower NovaSure system sales, despite higher sales of MyoSure
systems. On the other hand, revenues from Skeletal Health dropped
with lower sales of bone densitometry systems and mini C-arm
Hologic exited fiscal 2013 with cash and cash equivalents of
$829.4 million, higher than $566.1 million at the end of fiscal
2012. The company's long-term debt of about $4,805.9 million at
the end of the quarter was lower than the debt of $5,035.6
million at the end of the prior fiscal.
Hologic provided its guidance for both first-quarter fiscal 2014
and the full year. For the said quarter, the company expects
revenues of $600−$610 million (representing annualized decline of
5% to 7%) resulting in adjusted earnings of 30−31 cents per
share. Both revenue and EPS guidance were way below the current
Zacks Consensus Estimate of $643 million and 39 cents
For the full year, the company expects to report adjusted
revenues of $2,425−$2,475 million, representing a 1−3% decline
over the last year. The current Zacks Consensus Estimate of
$2,577 million lies outside the guidance range. The company also
expects its adjusted EPS guidance in the range of $1.32−$1.38.
The Zacks Consensus Estimate of $1.63 is way ahead of the
Hologic reported a dull quarter with both top- and bottom-line
miss. The company also posted a disappointing outlook for first
quarter and fiscal 2014.
In our opinion, the fourth-quarter results reflect that
Hologic is still plagued by several challenges - primarily lower
sales of legacy products, ongoing shift to 3D tomosynthesis
technology and tough capital spending environment among others.
If the fiscal 2014 guidance is any indication, the ongoing
concerns are likely to persist in the coming fiscal.
ALIGN TECH INC (ALGN): Free Stock Analysis
CARDINAL HEALTH (CAH): Free Stock Analysis
HOLOGIC INC (HOLX): Free Stock Analysis
MINDRAY MEDICAL (MR): Free Stock Analysis
To read this article on Zacks.com click here.
The stock presently carries a Zacks Rank #3 (Hold). While we
prefer to avoid Hologic at the moment,
Align Technologies Inc.,
Cardinal Health, Inc.
Mindray Medical International Limited
) are worth considering. All these stocks carry a Zacks Rank #1